Pierce v. Northwestern Mut. Life Ins. Co., Civ. A. No. 77-1082.

• Decision Date: 18 January 1978
• Docket Number: Civ. A. No. 77-1082.
• Parties: Gwin A. PIERCE, Sr., Plaintiff, v. NORTHWESTERN MUTUAL LIFE INSURANCE CO., Defendant.
• Court: U.S. District Court — District of South Carolina

444 F. Supp. 1098

Gwin A. PIERCE, Sr., Plaintiff, v. NORTHWESTERN MUTUAL LIFE INSURANCE CO., Defendant.

Civ. A. No. 77-1082.

United States District Court, D. South Carolina, Spartanburg Division.

January 18, 1978.

George Brandt, III, and Ruth L. Cate, of Henderson, Lister, Couch & Brandt, P. A., Spartanburg, S. C., for plaintiff.

Wesley M. Walker, of Leatherwood, Walker, Todd & Mann, Greenville, S. C., for defendant.

ORDER

HEMPHILL, District Judge.

Northwestern Mutual Life Insurance Company (NML) has moved for summary judgment on the basis that, as a matter of law, there are no substantial factual issues for determination, and that the plaintiff cannot prevail after an application of the law to the admitted facts. Since NML is the movant, all reasonable inferences, ambiguities, and conclusions, will be construed against it.

Statement of Facts

During the early 1970's, Gwin Pierce (Pierce) called the home office of NML, to express an interest in becoming affiliated with the company. The home office in turn called its area General Agent in Charlotte, North Carolina, and he thereafter called and went to see Pierce. During their discussions, it appeared that, perhaps, Pierce and his son, Gwin Pierce, Jr., both might become an agent for NML. Nevertheless, as it developed, the General Agent and Gwin Pierce, Jr. entered into a contract whereby Pierce, Jr. became a District Agent. At some time thereafter, and though neither the time nor the reason appears, Pierce, Jr. resigned as a District Agent.

Just prior to April 11, 1975, Pierce contacted the General Agent to discuss again the possibility of Pierce's becoming a District Agent for NML. Pursuant to this, on April 11, 1975 Pierce completed an application for a contract, and an actual contract, with the General Agent, and the contract was submitted to NML for approval, and it was approved. Before contracting with the General Agent, Pierce had been a life insurance agent for Mutual Life Insurance Company of New York for a brief period of time, and he then became a soliciting agent and, later, a district agent for Massachusetts Mutual Life Insurance Company. He had been with Massachusetts Mutual for a period of nine and one-half years, but he terminated employment with that company just prior to contracting as a District Agent for NML.

After Pierce became a District Agent in April 1975, he continually had difficulties with his General Agent relating to agents and training. These difficulties intensified in November 1976, and at that time Pierce started initiating direct contact with officials in the Agency Department of the home office of NML in Milwaukee, Wisconsin. Within two months, specifically, on January 10, 1977, the General Agent gave Pierce a notice of termination of his contract, effective February 10, 1977.

On February 23, 1977, the General Agent completed a "Request for Cancellation of Agent(s) or Adjuster(s)," a form prescribed and provided by the Licensing Division of the Department of Insurance, State of North Carolina. One of the blanks on that form required a "Reason for Cancellation," and the General Agent stated: "Failure to write sufficient business — would not follow guidance." This form was forwarded to NML, and on March 1, 1977 that form, along with a cover form from NML, was mailed to the North Carolina State Insurance Department for filing.

In his amended complaint, dated August 4, 1977, Pierce alleges two causes of action, one for defamation of character, and the other for breach of contract. He claims that the defamation was contained in the form filed with the North Carolina Insurance Commissioner, in the reason given for termination. He says that it was defamatory because he did follow guidance and did produce sufficient business. His claim for breach of contract is against NML also, even though he acknowledges that the General Agent, the individual with whom he initially contracted, was actually the one who brought about the termination and issued the notice.

On the defamation issue, NML submitted that, regardless of the truth of the statement, it was privileged and could not form the basis of an action because it was a mandatory filing, required by the North Carolina Department of Insurance, and on a form required by that department. NML also submitted that Pierce had failed to prove any publication of any defamatory statement. In addition to these assertions, NML said that it did not make the statement, but that it was made by the General Agent who is, by contract, an independent contractor, not an employee of the company.

On the issue of a breach of contract, NML submitted that, first, the contract was entered into and terminated by and between the General Agent and Pierce; and, second, that the contract specifically provided that it was terminable at will, by either party, without cause.

In response to NML's contentions, Pierce said that the official report did not enjoy an absolute privilege, but only a qualified privilege; that there was further publication of the defamation by virtue of a letter by the North Carolina Insurance Commissioner to Pierce's present employer, on September 19, 1977; and, that NML is bound by the General Agent's actions because he is an agent of NML pursuant to Section 38-51-10, Code of Laws of South Carolina (1976). In addition to those responses, Pierce alleged that, beginning in November 1976, and as a result of his discussions with officials in the home office, that NML, in effect, made a new contract with him by their assurances that everything would be taken care of. He does not specify what the new contract would be.

Conclusions of Law

Each party has engaged in discovery, consisting of interrogatories, requests for admissions, and depositions. It would appear that the depositions are from those who would have the most direct and conclusive knowledge of what occurred in this situation. In addition to this discovery which has been carried on, the parties have attached various documents to pleadings and memoranda. On the basis of all of this, the court has concluded that Pierce cannot prevail on either of his causes of action, against NML, for the reasons stated hereinafter.

Defamation

It is necessary to make some elementary statements on defamation or libel before making an application of these principles to the facts at hand.

The law of civil defamation attempts a balance between one person's right to speak or write freely, without fear of civil liability, and another person's right to enjoy his reputation without defamatory attacks. 50 Am.Jur.2d Libel and Slander § 1, p. 512. "Language is defamatory if it tends to expose another to hatred, shame, obloquy, contempt, ridicule, aversion, ostracism, degradation, or disgrace, or to induce an evil opinion of one in the minds of right-thinking persons and to deprive him of their confidence and friendly intercourse in society." Id., § 8, p. 520.

It is the function of the court, in the first instance, to determine whether a statement is susceptible of a defamatory meaning. Jackson v. Record Publishing Co., 175 S.C 211, 178 S.E. 833 (1935). Furthermore, an alleged defamatory statement must be judged in the light of facts known to the person to whom it was addressed. It is not those facts which the parties themselves know which control, but rather the facts known by the person who receives the statement. See, Klein v. Belle Alkali Co., 229 F.2d 658, 660, 662 (4th Cir. 1956), which held:

While it is elementary that language relied upon as libelous must be judged in the light of facts known by those to whom it is addressed, it is well settled that its meaning cannot be enlarged or extended by an innuendo in the pleadings.

* * * * * *

Furthermore, since the injurious character of the publication and the harm done to the plaintiff depends upon the manner in which the writing is understood by those to whom it is uttered, it must be read and construed in the sense in which the reader would ordinarily understand it; and if, when thus considered, it cannot reasonably be interpreted as defamatory, it will not serve as a basis for the action.

Going beyond this, an alleged defamatory statement must be determined from the document or material as a whole, from beginning to end, and words cannot be singled out as libelous, but rather, the material must be libelous within the context of the complete writing. 50 Am.Jur.2d, supra, § 141, p. 643.

In addition to the first requirement that a writing be defamatory, there is the second requirement that it be published to a third party. Publication must be an intentional, or at least negligent, communication of the defamatory matter to someone other than the person defamed. It must be said so that it will, or may reasonably be expected to, reach a third person. Riley v. Askin & Marine Co., 134 S.C. 198, 132 S.E. 584 (1926). Furthermore, even if a writing is defamatory, and it is published to a third person, the publication will be insufficient to maintain an action if it was invited or procured by the plaintiff or someone acting on his behalf. Boling v. Clinton Cotton Mills, 163 S.C. 13, 161 S.E. 195 (1931). One will not be allowed to induce, or instigate, a statement against him in order to achieve the requisite publication. Taylor v. Jones Bros. Bakery, 234 N.C. 660, 68 S.E.2d 313 (1951).

Tested against these elementary principles, Pierce's claim of defamation cannot stand. At the outset, the court is not persuaded that the alleged defamatory remarks are defamatory at all. They appear rather innocuous, especially when considered in the light of how they would be taken, understood, by the person receiving the publication, here, the North Carolina Department of Insurance. Obviously, that department is established for the regulation of insurance in the State of North Carolina, and the protection of its citizens. No reason appears why that department would have any interest in Pierce's production or ability...